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What counts as a preference
If, when insolvency is near, you pay one creditor in a way that puts them in a better position than they would be in a liquidation, that can be a preference — reversible by a liquidator. Repaying a director’s loan or a guaranteed debt to favour yourself is a classic example.
Staying safe
As trouble approaches, treat creditors even-handedly and take insolvency advice before making significant payments. Document the commercial reason for any payment.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Can a liquidator undo payments I made before failing?
Yes, if a payment was a preference — favouring one creditor over others as insolvency loomed. Payments to connected parties like directors face extra scrutiny.
How do I avoid making a preference?
Treat creditors even-handedly as trouble nears, avoid repaying yourself ahead of others, and take insolvency advice before significant payments.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.